Graduate School of Management, St. Petersburg State University

Nestlé

Consulting progect.

International Human resource management course

Group:

Alexandra Semina

Svetlana Soloveva Tatiana Serikova

Yana Tarasova

Professor: Marina Latukha

2012

Table of Content

1. Nestle: Background, markets, strategy. 3

1.1. History 3

1.2 Operations, products, services 5

1.3. Product markets 7

1.4. Geographic markets 8

1.5. Strategy and organizational structure 9

1.6. Corporate culture 11

2. Human resource Management at Nestle 13

2.1. IHRM strategy and corporate culture 13

2.2. Job analysis and planning 15

2.3. Recruitment 18

2.4. Expatriate issues 20

2.5. Training and development 22

2.6. Career management 26

2.7. Performance Appraisal 27

One2One Promotion: The Importance of Employee Motivation [Electronic Resource] // the official Nestle site for employees. – access: http://www.nestleprofessional.com/united-states/en/SiteArticles/Pages/One2OnePromotionTheImportanceofEmployeeMotivation.aspx. - from the title page. 28

List of references 29

Appendix 1. 32

1. Nestle: Background, markets, strategy.

1.1. History

The history of the largest food and beverage company in the world began in 1866 in Switzerland with a launch of a new product – infant milk called Farine Lactee Henri Nestle. It was invented by a pharmacist Henri Nestle, who wanted to help those women, who cannot feed their newborns with a breast.¹

Since that time the company began its expansion abroad, opening new factories and building warehouses all over the world. The company focused not only on the US and European markets (ex.: Spain, Germany, etc.), but also paid attention to the emerging and fast-growing Asian markets (ex.: Singapore, Hong Kong).

Till the 1920s, the company’s only product line was infant milk, then they started to work with chocolate, such products as malted milk, a powered beverage and powdered buttermilk for infants. In 1938, Nestle announces about its first instant coffee, Nescafe, which is nowadays well-known all over the world. Nowadays Nestle’s brand portfolio has about 6000 different items, among those are bottled water (Perrier, Buxton), coffee (Nespresso, nescafe), milkshakes and other beverages (Carnation, Milo, Nesquik), chocolate (After Eight, Milky Bar and etc.), ice cream (Scinny Cow, Haagen-Dazs), infant food (including Gerber), breakfast cereals (Shreddies, Golden Naggets and etc.), performance and healthcare nutrition (PowerBar, Nestiva and etc.), soups, seasonings and sauces (Buitoni, Maggi and etc.), refrigerated and frozen food (Lean Cuisine, Findus and etc.), confectionary (Caramac, Wonka products, Rowntree products and etc.) and, moreover, pet food (Felix, Winolot).² More about the product lines of Nestle will be discussed in 1.3. Product Market.

Fast-growing company was developed by using M&A strategy. Dozens of deals were arranged to broaden the existing product portfolio and to increase share in product and beverage markets. The most dynamic time period began after the Second World War. Making decisions about the M&A, the company was trying to meet consumers’ needs and demand. Here are only some examples of the companies which we acquired by Nestle: Anglo-Swiss Condensed Milk Company (1905), Alimentana (1947, the best known brand is Maggi), L’Oreal (1974, Nestle became a major shareholder), Alcon Laboratories (1970, a pharmaceutical and ophthalmic products), Carnation (1985, an American food giant), San Pellegrino(1998, an Italian mineral water concern), ice-cream producers: Schoeller Holding Group (2002), Movenpick (2003) and Dreyer's (2003). As we can see, the strategy of the related diversification was mostly used (except L’Oreal, a cosmetics manufacturer). It is important to mention, that time to time the company reviewed its product portfolio and was forced to reorganize the structure to get rid of unprofitable businesses.

Among the latest deals, the purchase of baby food manufacturer Gerber (based in the USA) for five and a half billion US dollars in 2007. In the end of that year Nestle also agreed on a strategic partnership with Pierre Marlcolini, a famous chocolate maker from Belgium).Then in 3 years Nestle bought Kraft’s North American frozen pizza for $3.7 billion. Last year, in July, Nestle paid $1.7 billion for 60% of Hsu Fu Chi International LTD., an investing holding company (China).³

The Nestle products penetrated the Russian market in the end of the XIX century, when Alexander Vencel signed the exclusive agreemnt with Henry Nestle about the delivery of the dairy products to the market of Russian Empire. Then in the beginning of 90s Nestle created the network of importers and distributers who were highly interested in increasing sale volume and in growing demand. The brand recognition played an important role.

On April of 1995 Societe pour l’Exportation des Produits Nestle S.A. opened its representative office in Moscow. In a year “Nestle Food” became an independent Russian company, created a chain of storehouses and developed marketing and sales incentives to promote the products in Russian market. In 2006 the regional offices, which were situated in Eurasia, started to be run by the headquarter “Nestle”, so the company broadened its geographic presence and began to operate in Russia-Eurasia region. Nowadays Nestle is a leader in coffee industry, infant food, gastronomy, packed chocolate and cereals. Its market share is growing in the market of ice-cream and pet food.⁴

The success in Russian market can be explained by the number of factors. And the main one is that Nestle strengthened its presence and broaden it thanks to investments which were made in production and manufacturing, active marketing and development of distribution chain.

Futhermore the products of Nestle has extremely high level of recognition and popularity among Russian customers what can be proved by the fact that such products as Nescafe, Maggi and Rossiya Schedraya dusha were awarded the status of “Household brand” or “Narodnaya marka”.

In 1998 the American Chamber of Commerce in Russia announced that Nestle was the company of the year for its commitment to Russian market, increase in market share and brand recognition.